Dead Sea, Jordan -- The United States has
received enthusiastic responses from numerous Arab
governments to President Bush's proposal to build a
U.S.-Middle East Free Trade Area by 2013, Secretary of State
Colin Powell says.

"Everybody sees the linkages between
the various issues we've been talking about in the last
several days. We want peace in the region, but with peace,
you need economic development or the people will not benefit
from the peace," Powell said at the World Economic Forum
meeting on the Jordanian shore of the Dead Sea June
23.

Bush announced his Middle East Free Trade Initiative
at a speech at the University of South Carolina May 9. The
initiative, designed to lead to a U.S.-Middle East free
trade area within ten years, involves a comprehensive offer
to help Arab countries carry out educational, economic, and
infrastructure developments to enable them to build free,
dynamic economies and raise standards of living.

In 2000,
Jordan became the first Arab country to conclude a free
trade agreement with the United States. U.S. Trade
Representative Robert Zoellick said he expects negotiations
for a free trade agreement with Morocco to reach a
successful conclusion by the end of this year and similar
negotiations with Bahrain to begin in 2004.

Jordanian
Minister for Trade and Industry Salah Eddin Bashir said the
reforms required to conclude a trade agreement have resulted
in a surge of exports to the United States, heightened
prosperity, and the creation of tens of thousands of
jobs.

In 1999, the year before the free trade agreement
was signed, Jordan's exports to the United States amounted
to less than $20 million, Bashir said. By the end of 2002,
the United States had become Jordan's largest trading
partner, and so far in 2003, Jordan has exported about $500
million worth of goods to the United States, Bashir
said.

About 70 percent of the 30,000 new Jordanian jobs
resulting from the free trade agreement have gone to women,
Zoellick said. The trade representative said he and Jordan's
King Abdullah planned to inspect a $175 million
Jordanian-U.S. joint venture June 23 that had come about as
a result of the free trade agreement. He added that the U.S.
software giant Microsoft is investing in Jordan and Cisco
Systems is establishing an academy for a two-year program in
computer training.

Before arriving in Jordan for the
economic forum, Zoellick visited Bahrain and sat in at
classes at the national Institute of Banking and
Finance.

"They are drawing people from all over the Gulf.
Their goal is to be not only a financial center but also an
educational center" that extends to health services and
other areas, Zoellick said.

Zoellick noted that in Morocco
the U.S Agency for International Development has made
micro-loans averaging $240 to 250,000 people, 54 percent of
whom are women.

"This has created a whole new sense of
opportunity at the grass roots level. The default rate is
less than one-fourth of one percent. There is opportunity
throughout the region, both in the private and the
government sectors," Zoellick said.

Zoellick said the
United States hopes that free trade agreements with
individual countries will lead to the gradual economic
integration of the Arab world.

"For example, we look
toward the possibility of countries in the Gulf joining into
the Bahrain Free Trade Agreement, making specialized
arrangements for their goods and agriculture but following
the basic rules. That would have the benefit of encouraging
regional integration, so that the products to qualify would
not have to come just from Bahrain but may come from Qatar
or Oman or the United Arab Emirates or a combination,"
Zoellick said.

Zoellick said the economic integration of
the Gulf, North Africa or other regions could lay a
foundation for a Middle East-wide free trade area.

"That
depends on the willingness of governments to undertake these
reforms," Zoellick said.

A portion of the trade promotion
talks dealt the Palestinian territories, which have not been
able to benefit from free trade opportunities with the
United States since the mid-1990's because of poor security
and access, Zoellick said. He said special efforts will be
made to increase trade opportunities for the Palestinians to
help realize President Bush's vision of two states, Israel
and Palestine, existing side by side in peace and
security.

Zoellick said the free trade initiative is a
step-by-step approach that involves six phases:

--
actively supporting World Trade Organization membership for
peaceful countries in the region that seek it.

-- helping
Arab countries expand access to the Generalized System of
Preferences, which allows some 3,500 products from 140
countries to enter the United States duty-free. In 2002,
nearly $300 million worth of products from the Middle East
qualified for this program, including Egyptian furniture,
Omani jewelry and Lebanese olive oil, the trade
representative's office said.

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